Culture is invisible power of any organization.

Wagner and Hollenbeck have defined organizational culture as “the shared attitude and perceptions in an organization that are based on a set of fundamental norms and values and help members understand the organization.”

The corporate culture “consists of norms, values and unwritten rules of conduct of an organization as well as management styles, priorities, belief and interpersonal behaviours that prevail. Together they create climate that influences how well people communicate, plan and make decisions”

Organizational culture originates from the founders of the organization based on value system held by them. It is further passed on, down the line.

It is visible from the organizational structure. Centralized command and control, strict hierarchy and fixed communication are indicative of formal culture. While decentralized work culture will promote autonomy that will lead to greater job satisfaction.


  • gives members an organizational identity
  • facilitates collective commitment towards the common purpose
  • encourages lasting integration and cooperation among the members of an organization, thus promoting stability
  • serves as a source of shared meaning that explains why things occur the way they do
  • facilitates the generation of commitment to something larger them one’s individual self-interest.
  • serves as a control mechanism that guides and shapes the attitude and behaviour of organizational members



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The factors that are most important in the creation of an organization’s culture include founders’ values, preferences, and industry demands.

Founder Values

The vision of founders and various functions of the organization create culture. Their ideology and customs are bedrock of any organizational culture.

The mission and vision of founder members, hard work, competitive spirit and the way of life is important as it establishes cultural value of any organization.

The vision of Ratanji Tata has created a Tata culture.

Luthans has suggested following two steps in creation of culture.

1. A single person (founder) has an idea for a new enterprise.
2. The founder brings in one or more other key people and creates a core group that shares a common vision with the founder. That is, all in the core group believe that the idea is good one, is workable, is worth running some risk for.

Industry Demands

The industry characteristics and demands act as a force to create similarities among organizational cultures. For example, despite some differences, many companies in the insurance and banking industries are stable and rule-oriented, many companies in the high-tech industry have innovative cultures.

How Are Cultures Maintained?

Organizational culture determines what types of people are hired by an organization and what types of people are left out. Moreover, once new employees are hired, the company assimilates new employees and teaches them the way things are done in the organization.


Organizational culture is maintained through a process known as attraction-selection-attrition (ASA).

Attraction: Employees with different personality traits find different cultures attractive.

Selection: Companies hire people who fit with their culture, as opposed to fit with a certain job.  For example, Google relies on multiple interviews with future peers. By introducing the candidate to several future coworkers and learning what these coworkers think of the candidate, it becomes easier to assess the level of fit.

Attrition: Attrition refers to the natural process where the candidates who do not fit in will leave the company.

Because of the ASA process, the company attracts, selects, and retains people who share its core values, whereas those people who are different in core values will be excluded from the organization either during the hiring process or later on through naturally occurring turnover. Thus, organizational culture will act as a self-defending organism where intrusive elements are kept out.

New Employee Onboarding / Organizational Socialization

Onboarding refers to the process through which new employees learn the attitudes, knowledge, skills, and behaviors required to function effectively within an organization.

Socialization starts once an individual is selected. The training programme is scheduled in such a fashion that ‘on the job training’ is given to an individual along with making him aware of organizational culture.


Pre-arrival Stage: It is diagnosis stage, which identifies, in an individual the possibilities of socialization (adaptation) of the organization’s culture. Psychologists and behavioral scientists
are invited to smoothen individual values to suit the organizational requirement.

Encounter Stage: It is an induction stage where a recruit joins an organization and is put through the job. Recruit is expected to learn and follow organizational value system.

Metamorphosis Stage: It is a consolidation stage where individual learn the values, norms, culture of the organization. This becomes a steppingstone to be an effective member of the team. It is “refreeze stage” of change process.


There is a direct correspondence between the leader’s style and an organization’s culture. For example, when leaders motivate employees through inspiration, corporate culture tends to be more supportive and people-oriented.  The leader’s own behaviors will signal to individuals what is acceptable behavior and what is unacceptable.

Reward Systems

Culture is shaped by the type of reward systems used in the organization and the kinds of behaviors and outcomes it chooseaapenalty cc

s to reward and punish. The types of behaviors that are rewarded or ignored set the tone for the culture.

Signs of Organizational Culture

  • Mission Statement
  • Rituals/ Ceremonies – repetitive activities within an organization that have symbolic meaning
  • Rules and Policies
  • Physical Layout
  • Stories and Language


Developed by Professor T V Rao

The elements of OCTAPACE are as follows:

• Openness: An environment where employees feel free to express their ideas and the willingness of the organization to take risks and to experiment with new ideas and new ways of doing things.
• Confrontation: Employees face the problems and work jointly with others concerned to find its solution. They face the issues squarely without hiding them or avoiding them for fear of hurting each other.
• Trust: The extent to which employees individually and in groups trust each other and can be relied upon to do whatever they say they will do.
• Authenticity: The willingness of a person to acknowledge the feelings he/she has, and to accept him/her as well as others who relate to him/her as persons.
• Proaction: Employees are action-oriented, willing to take initiative and to show a high degree of proactivity. They anticipate the issues and act or respond to the needs of the future.
• Autonomy: The willingness to use power without fear, and helping others to do the have freedom to act independently within the boundaries imposed by their role/job.
• Collaboration: This involves working together and using one another’s strength for a common cause. Individuals, instead of solving their problems by themselves, share their concerns with one another and prepare strategies, work out plans of action and implement them together.
• Experimentation: This involves emphasis given to innovation and trying out new ways of dealing with the problems in the organization.

Rao T V (2003) has stated that when the OCTAPACE values are present in the following combinations, organizations benefit more. The combinations are:
• Openness and Confrontation
• Autonomy and Collaboration
• Trust and Authenticity
• Proaction and Experimentation.

Rao elaborated that if these values were practiced in an organization; they become a part
of life and are likely to get the best out of people at work.


The major challenge for any company is maintaining its healthy organizational culture. Maintaining your organizational culture will increase the level of employee engagement leading to better Job satisfaction and reduced turnover.

Another major challenge is re-inforcing the organisational culture at all times.

An another challenge is ensuring involvement of all team members.

Culture needs to be integrated in a natural way to ensure everyone feels they are part of the process.


According to Bowditch and Buono “Organizational culture is with the nature of
belief and expectations about organizational life, while climate is an indicator of
whether those beliefs and expectations are being fulfilled.”

Hodgetts has classified organizational climate into two factors as under:

(a) Overt Factors (Open Visibly)
• Hierarchy
• Goals of the organization
• Financial resources
• Skills and abilities of employees
• Technological state of the organization
• Performance standards adopted
• Efficiency measurement

(b) Covert Factors (Not visible openly)
• Values
• Attitude
• Norms
• Feelings
• Interaction
• Supportiveness
• Satisfaction

Likert has carried out studies on organizational climate by isolating six different variables namely decision making, leadership style, motivation, goal setting, communication and control.


  1. Organisation Culture emphasizes building on employees’ strength and rewards more than punishments. It emphasizes individual vitality and growth. Elucidate. (UPSC 2014)
  2. Organisation Culture is the long term phenomenon that decides the success or failure of mission and vision of the organisation and ultimately its survival in the current global scenario. Explain this statement and also identify the cultural problems of modern business organisations. (UPSC 2015)
  3. Explain the following – Ritualism. (UPSC 2016)
  4. Discuss how can culture of safety be built and sustained in an organisation dealing with hazardous chemicals. (UPSC 2012)
  5. Essentially group think results from the pressures on individual members to conform and reach consensus. Committees that are suffering from group think are so bent on reaching consensus that there is no realistic appraisal of alternative courses of action in a decision and deviant, minority or unpopular views are suppressed. Make an analysis of this statement and state how management is expected to be inclusive of all views for creating dynamic organisation climate. (UPSC 2013)
  6. In today’s dynamic business environment, continuous learning and innovation is important for survival of organisation. In view of this, explain the role of culture in increasing organisational effectiveness. How is the culture linked with size, structure, complexity, diversity and leadership? (UPSC 2013)

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